Investors in PetMed Express Inc.’s stock are suffering their worst day in 23 years, after the pet medication and supplies company reported disappointing quarterly results and said it would suspend its dividend to save cash. The stock
plummeted 32.1% in midday trading. That put the stock on track for the lowest close since Nov. 19, 2004, and for the biggest one-day selloff since the record 37.5% plunge on May 5, 2000.
“Today’s announced change in capital allocation follows a thorough and detailed analysis by our Board of Directors along with the management team,” said Chief Executive Matt Hulett. “By suspending the quarterly dividend, we have the opportunity to invest the company’s cash flow in projects and initiatives that we believe will yield higher returns.” The company last paid out a quarterly dividend of 30 cents a share on Aug. 18. At current stock prices, the previous annual dividend rate of $1.20 implied a dividend yield of 19.26%, which compares with the implied yield on the S&P 500 index
of 1.67%. The dividend cut was part of the company’s fiscal second-quarter report released late Monday. For the quarter to Sept. 30, the company swung to a net loss of about $70,000, or essentially breakeven on a per-share basis, from net income of $2.6 million, or 13 cents a share, in the same period a year ago. (There weren’t enough analysts estimates provided to FactSet to have a consensus.) Revenue rose 8.6% to $71.0 million, as 75,600 new customers were added during the quarter, representing a 25% increase from last year. The latest quarter’s revenue includes results …